(Credit: Amazon)
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As SpaceX lobbies for more federal funding for Starlink, the company is facing a new setback in Colorado, which is awarding a major portion of its broadband projects to a rival satellite provider.
On Friday, Colorado announced the winners of its $400 million US Broadband Equity, Access, and Deployment (BEAD) program. Its proposal stands out for picking satellite services to deliver high-speed internet to about half of the underserved locations. Other states, such as Virginia and Louisiana, have decided to mostly lean on faster, but more expensive fiber installations.
Colorado selected satellite internet providers for over 47,000 of the 96,000 underserved and unserved locations that will get BEAD funding. The rest will receive mostly fiber.
(Credit: Colorado BEAD)The news may sound like a win for SpaceX. But Colorado awarded the vast majority of the locations, over 42,000, to Amazon’s upcoming Project Kuiper satellite service, which is slated to receive $25.35 million in BEAD funding. In contrast, SpaceX was only selected for 5,400 locations and $9.16 million in federal subsidies.
SpaceX has been demanding that Virginia and Louisiana revise their BEAD proposals over claims the states rigged their programs to overlook Starlink and favor fiber. SpaceX has even urged the Commerce Department to intervene. The Trump administration overhauled the BEAD program to prioritize “technology neutrality,” paving the way for satellite services to receive more money. The Commerce Department has to sign off on each state's BEAD proposal.
SpaceX didn’t immediately respond to a request for comment, but it’s possible the company might protest Colorado’s BEAD allocations. Amazon’s Project Kuiper has yet to officially launch and currently has only about 100 satellites in orbit. In contrast, SpaceX’s Starlink has been in operation for nearly five years and spans over 8,000 satellites.
Last month, SpaceX also indicated that Starlink is already serving over 2 million active customers in the US. The sizable user base might explain why Colorado picked Kuiper over Starlink, which has faced network congestion issues in the Pacific Northwest from too many users oversubscribing to the satellite internet system.
Colorado’s BEAD proposal notes that “the application with the best combination of network speed and capacity was preliminarily selected” as a factor during the bidding process. In addition, Starlink is already available to Colorado consumers; the company even offers discounted monthly service to eligible users.
In the meantime, other US states—including Arkansas, Pennsylvania, West Virginia, and Wisconsin—have also published their BEAD proposals, and they plan to focus mostly on fiber over satellite. Some critics have slammed SpaceX's lobbying efforts since it's poised to take federal subsidies away from fiber installations that can offer gigabit speeds without capacity restrictions. However, SpaceX argues it can provide cheaper high-speed internet access by using satellites, thus saving taxpayer dollars.
Under the BEAD program, satellite providers such as Starlink and Project Kuiper must provide the satellite dish antenna for free to eligible locations while reserving network capacity. But they’re under no obligation to offer a discounted service to all subscribers. The revised BEAD program has also stripped away a state's ability to set the pricing for internet plans meant for low-income users.